Agreement leaves toughest trade issues unsolved

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Hong Kong, Dec 19: The World Trade Organisation’s (WTO) 149 governments failed to resolve their most intractable disputes during six days of talks in Hong Kong, complicating efforts to wrap up an accord worth $96 billion to the global economy.

In a bid to keep alive talks on reducing tariffs and aid globally, the US agreed to expedite cuts in payments to cotton farmers and the European Union promised to scrap all of its export subsidies for farmers by 2013. Both pledged to allow in 97% of imports from the poorest nations duty free.

The trade ministers left Hong Kong with little progress on hammering out a formula to lower tariffs worldwide or establish new rules to relax limits on foreign investment. That means companies such as Caterpillar Inc., Axa SA and Microsoft Corp won’t see any immediate benefit from the deal.

Negotiators agreed to tackle those questions by April 30.

“The WTO ministers kicked the can down the road,” John Engler, president of the Washington-based National Association of Manufacturers, said as talks wrapped up last night. “None of the big decisions were made.”

The talks, held against the backdrop of violent protests that shut down one of Hong Kong’s main business districts, are aimed at crafting new policies that will govern everything from tariff rates and food-safety rules to copyright protection for movies and software. Global trade negotiations have proceeded in fits and starts since the last round of talks was completed more than a decade ago. Two of the last three summits collapsed.

WTO governments are aiming to finish off their talks before the July 2007 end of US President George W Bush’s authority to get swift congressional consideration of a trade deal. The US, the world’s biggest importer, buys 16% of all traded goods, according to the WTO.

Without an accord, which the World Bank says would pump $96 billion into the global economy and lift millions from poverty, support for more trade liberalisation may wane. That could lead to new barriers to imports and more bilateral deals.

Negotiators as well as WTO chief Pascal Lamy had scaled back their goals for the summit even before it began on December 13. They spent the lion’s share of their time in Hong Kong on issues that are largely peripheral to the WTO.

“How long can we maintain enthusiasm while trade talks crawl along?” EU Trade Commissioner Peter Mandelson asked after the negotiations concluded.